INSURANCE. 



trade there, and e»en in partnerfliip witji an alien enemy, 

 may infure his interell in the joint property. 



Thofe who are infurers, or underwriters, fliould be per- 

 sons of great prudence and circumfpeftion ; and cafes may 

 occur, which will require more than ordinary fagacity, pe- 

 netration, and experience. At common law, any man, or 

 company of men, might be infurers ; and individuals, upon 

 their own feparate account, have ilill the fame right. But 

 about the beginning of the lail: century ic was thought expe- 

 dient, partly with a view of counteradling the evil arifing 

 frem infurance by infufRcient perfons, and perhaps, princi- 

 pally for enabling government to raifc a fnm of money by the 

 fale of a monopoly, to ereft two companies for making ma- 

 rine infurances, with fuch funds to anfwer all demands on 

 their pohcies as might give cenfidence to mercantile adven- 

 turers, who were unwilling to depend on individual under- 

 writers ; ftill, however, leaving to merchants the option of 

 infuring with fuch underwriters whom they thought proper. 

 To this end the flat. 6 Geo. I. c. 1 8, authorized the king 

 to grant charters to two diftinft companies or corporations, 

 for the infurance of {hips, goods, and merchandize, at fea, 

 or going to fea, and for lending money on bottomry. In 

 purfuance of the powers given by this aft, the two propofed 

 companies, the one called the " Royal Exchange Adurance,'" 

 and the other the " London AfTuraiice," were ellablilhed by 

 royal charter, bearing date June 22, 1720. The moil im- 

 portant privilege granted to thefe companies was the exelu- 

 five right of making marine infurances, and lending money 

 on bottomry, as a " Company" or " Partnerfhip," on a 

 " joint capital." 



Infurance is faid to be " a contract of indemnity from lofs 

 or damage, arifing upon an uncertain event." So that the 

 objeft of infurance is to avoid a pofllble lofs. Hence it ap- 

 pears, that there cannot be an indemnity without a lofs, nor 

 a lofs without an intereft. A policy, therefore, without 

 interell, is not an infurance, but a mere wager. It is not 

 eafy to define and afcertain infurable interell. The intereits 

 of commerce, and the various rights which different perfons 

 may have in the fame thing, require that not only tliofe who 

 have an " abfolute" property in fliips and goods, but thofe, 

 alfo, who have a " qualified" property in them, may be at 

 liberty to infure them ; and this principle has been fo extended, 

 that if a merchant abroad, in order to fecure the payment of 

 a debt due to his correfpondent in England, mortgage to him 

 his intereft in certain goods and freight ; the correfpondent, 

 after the mortgage becomes abfolute, may infure the " legal" 

 intereft on his own account, or the " equitable" interell on 

 account of the mortgagor. A reafonable expeftation of 

 -' profit,'' or a well-founded expeftation of a future intereft 

 in the thing infured, is -an infurable intereft. But a mere 

 hope or cxpeftation of future gain, however well founded, 

 is not an infurable intereft, unlefs accompanied by polTeffion 

 of the fubjeft-matter of the infurance. Of this nature is the 

 intereft which the captor acquires in a prize regularly taken 

 in war. It alfo appears, that perfons in the charafter of 

 " truftees,'' for the difpofal of fhips and goods according to 

 fuch inftrudlions as they mii^ht receive from third perfons, 

 may infure fuch fhips and goods for the benefit of the per- 

 fons who may eventually be entitled to the produce of tliem. 

 Accordingly, commiflioners, entitled " The Honourable 

 Commifrioners for the Sale of Dutch Property," were ap- 

 pointed by ^^ Geo. III. c. 80. § 21. to take into their care 

 all Dutch ftups, &c. detained in Britiih ports, and to dif- 

 pofe of them in purfuance of direftions from the privy coun- 

 cil ; and they were authorized to infure, in their own names, 

 fuch (hips, after feizure at fea, and while they were on their 



paffage to England. At common law, an infurance might 

 have been made without intereft ; nor is it neceflary to aver 

 intereft in any cafe not prohibited by 19 Geo. II. c. 37. 

 An infurable intereft can only be founded on a legal or equi- 

 table title ; but a mere claim, which the law cannot admit 

 to be either legal or equitable, is not an infurable intereft. 

 As freight can only be due to the legal owner of a fliip, he 

 only can infure it ; and no pcrfon can have either a legal or 

 equitable title to a ftiip, unlefs he be named in the regifter. 

 Although " refpondentia" and " bottomry" areof themfelves 

 a ipecies of infui'ance, yet the lender has an infurable inte- 

 rell in his fecurities, and therefore may protedl himfelf from 

 the fea-rifli by infuring them. However, a policy on bot- 

 tomry or refpondentia cannot be fubfcribed by the borrower 

 of the money ; for if he were to become an infurer, this 

 would be no longer a loan upon bottomry, bst a cloak for 

 ufury. See /^fl^fz-PoLiCY, and the fequel of this article. 



Infurances are of various kinds, as on fhips or parts of 

 Ihips, on merchandize fingly, and on ftiips and goods jointly, 

 on freight, and bottomry loans ; and thele are again branched 

 out to run either for a time ilipulated, or to one fingle 

 port, or out and home, with liberty to touch at the different 

 places mentioned in the policy. 



It is laid dovin as a general rule, that no infurance can be 

 legally made upon any voyage undertaken contrary to the 

 laws of this kingdom, or to thofe of its dependencies, or to 

 the law of nations. Nor is it of any importance whether 

 the infurer was or was not informed that the voyage was ille- 

 gal. Confequcntly, an infurance upon a voyage undertaken 

 contrary to the navigation laws would be void. The cafe is 

 the fame with regard to a voyage prohibited by the laws 

 made for the proteftion of the monopoly of the Eaft India 

 company. Under the treaty allowing the Americans to trade 

 to the Britifti colonies in India, concluded in 1795 and con- 

 firmed by 37 Geo. III. c. 97, it is not neceflary that this 

 trade ftiould be carried on from America to the Britifli fet- 

 tlements in the Eaft Indies " diretl ;" but it may be carried 

 on " circuitoufly'' by the way of Europe. With refpedl to 

 the riflis or perils againft which infurances are ufually 

 made, they are exprelfed in the words of the policy, which 

 are as follow : " Touching the adventures and perils which 

 we theaflurers are contented to bear, and do take upon us in 

 this voyage, they are of the feas, men of war, fire, enemies, 

 pirates, rovers, thieves, jettifons, letters of mart and counter- 

 mart, furprifals, takings at fea, arrefts, reftraints and de- 

 tainments of all kings, princes, and people, of what nation, 

 condition, or quahty whatloever : barratry of the mafter a;.d 

 mariners ; and of all other perils, lofles, and misfortunes, 

 that have or Ihall come to the hurt, detriment, or damage 

 of the faid goods and merchandize, and (hip, &c., or any 

 part thereof, without prejudice to this infurance." But by 

 the agreement of the parties, the general words of the policy 

 may be altered or qualified, and any of the rill<s may be 

 wholly or in part excluded : and the infurance may be made 

 only againft fome particular rifles, or up to, or beyond cer- 

 tain degrees, or upon particular articles. In the pohcies of 

 moll countries it is ftipulated that the infurer ftiall not be 

 liable for any partial lofs under a given rate per'cent. A claufe 

 to this purpofe, which was fi'-ft introduced in 1 749, is in- 

 ferted at the bottom of all Englifti policies, Neverthelcfs, 

 the infurer is liable for loflfes, however fmall, called " general 

 average," and lofles occafioned by the " ftranding of the 

 fliip." In the policies of private miderwriters the memoran- 

 dum is as follows : " corn, (comprehending every fort o£ 

 grain, and alfo peafe and beans,) fifli, fait (not nicluding 

 falt-petre), fruit, flour and feed, are warranted free from 

 9 average 



